Published on 20 Mar 2023 on Zacks via Yahoo Finance
Wall Street has been witnessing extreme volatility and a sharp correction in the valuation of equities in the past year. Inflation remains highly elevated despite declining from a 40-year high in June.
Over the past year, most of the economic data has stayed resilient indicating solid fundamentals of the U.S. economy. Good economic data turned bad for investors as it forced the Fed to raise the benchmark interest rate by a massive 4.5% from March 2022 to February 2023.
However, the entire landscape has changed dramatically this month as an aggressive interest rate hike by central bankers globally started affecting the banking sector. In the United States, the two major reginal banks, namely, Silicon Valley Bank and Signature Bank collapsed. Another regional bank, First Republic Bank (FRC), is currently surviving on life support.
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